Advanced Competitive Strategy will introduce new topics and modules with even more real world examples and opportunities for student interaction than in the previous course Competitive Strategy (https://www.coursera.org/learn/competitivestrategy).
In Advanced Competitive Strategy, we will look at how companies can build up and maintain their customer base by increasing switching costs and facilitating strategic customer lock-ins. We will find out how firms can increase their profits by pursuing suitable price discrimination and product differentiation strategies.
We will look at examples of what is acceptable behavior under the premises of EU competition and US antitrust policies and discover exciting ways of how companies can increase their returns by strategically making use of network effects and economies of size. We will further intensify our newly acquired knowledge about network effects and discuss strategies that are explicitly tailored to network markets.
We will analyze the workings of mergers and acquisitions and, moreover, support you in considering alternative strategies that can help companies grow organically.

NT

Thank you!\n\nAll needed skills are efficiently explained and allow the student to understand and deal even with more complex and multi-pronged subjects.

Na lição

Increase your Returns

In this module, we are going to discover two very important new concepts with which you can increase your business’s returns: Network effects and boundaries of the firm. We will find that considering these two concepts in formulating our business strategy can help us improve our strategy’s effectiveness and eventually increase our returns.

Ministrado por

Tobias Kretschmer

Transcrição

Welcome back. After having learned the concepts and the pros and cons of economies of scale, it's now the time to get a bit more realistic, and to also discuss possible hindrances to economies of scale and scope. And there can be quite a few. So what are these sources of diseconomies? Where could these diseconomies of scale and scope come from? Well, to begin with, we can think of labor costs as a source of diseconomies of scale. Larger firms often end up paying higher wages. Why? Because unionization is more likely in larger firms. So these unions, generally, will negotiate higher wages for their members. Which, of course, means that the larger a firm is, the more likely it is to be paying higher wages. Secondly, employees in smaller firms might have more complete tasks and slightly more enjoyable work because the division of labor in large firms tends to be much more advanced. So you might have to pay a premium for employees working in large firms. Finally, large firms may also have to attract workers from further away places. Why could that be? Well, if your local talent pool is just too small for the type of work that you need, or the type of tasks and skills that you need, you will have to start recruiting from further away. And that means that you often have to at least pay the relocation costs. And secondly, you might also have to end up paying them a higher wage to make sure that they come and actually leave their home and so on. Second, there can be incentive and bureaucracy effects. So when a firm gets large, it gets more difficult to monitor and communicate with workers. So simply, managing a larger number people makes it less likely that you can communicate with them on a regular basis. And secondly that you can monitor them and make sure that they actually work as you plan them to. So one consequence of this might be that you have to introduce additional layers of middle-management, who will monitor and communicate and control workers below you. Secondly, it's going to be more difficult to evaluate and reward individual performance. So, if for example, production is organized in teams, then allocating a piece of outputs to one particular person is going to be near impossible. So evaluating and rewarding individual input or output is going to be impossible. Finally, for professional services firms, conflicting out might be a problem. This simply means that professional services firms may find it difficult to sign up a client if they already consulted or if they already worked for a competitor. So this is especially strong, this effect is especially strong, when sensitive information has to be shared. So these conflicts of working for different competitors might impose a limit to the growth of the firm. So, unfortunately, there's a limit to most things in life. And this is also true for real life applications of economies of scale and scope. In the next video, therefore, we'll consider supplier buyer relationships. And check out how we can evaluate whether it's more profitable to produce everything ourselves or whether we should simply buy what we need to create value.